racial equity impacts of the economic recovery

john a. powellKirwan Institute for the Study of Race and Ethnicity

What is happening? An unusual recession/economic crisis A deep and uneven recession/economic crisis

Implications? Long term

The response Our Critique What needs to happen

Our Recovery Principles Recovery fund investments must

be marked by full transparency and accountability

Families and communities hit hardest by the economic crisis merit focused attention in the recovery process

Investments must promote equity and expand opportunity for all (targeted investment)

Our work/initiatives National work State level assistance Research, communications

3

The recession has hit the entire nation, but the economic impact has varied across the nation’s states and communities.

Our goal for Recovery should be national, but our investment strategy must reflect the disparate economic impact among our states and communities.

Is the Recovery reaching our hardest-hit communities?

Health, 55.3, 55%

Education & Training, 29.0,

29%

Transportation, 8.6, 9%

Income Security, 3.5,

4%

Community Development,

2.4, 2%

Energy and Environment,

1.2, 1%

Actual Federal Outlay (in $billions) Was ARRA built to

stimulate or stabilize the economy?

Was ARRA designed with equity in mind?

Source: Government Accountability Office (GAO), November 27, 2009

(1) To preserve and create jobs and promote economicrecovery.(2) To assist those most impacted by the recession.(3) To provide investments needed to increase economic

efficiency by spurring technological advances in science and health.

(4) To invest in transportation, environmental protection, and other infrastructure that will provide long-term economic benefits.

(5) To stabilize State and local government budgets, in order to minimize and avoid reductions in essential services and counterproductive state and local tax increases.

7

9.4 9.39.0 8.7 8.8 8.8 9.0

15.7 15.616.2

16.515.8

16.5 16.5

13.112.7 12.9 12.6 12.4 12.6 12.5

10.1 10 109.7 9.7 9.7 9.9

8.0

9.0

10.0

11.0

12.0

13.0

14.0

15.0

16.0

17.0

Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10

White Black Latino Total

National Unemployment Rates by Race

Source: US Bureau of Labor Statistics)

9.2

18.0

11.210.3

7.4

13.7

11.1

8.6

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

20.0


Men Women

May Unemployment Rates by Race and Gender


23.5

37.3

29.225.7

8.4

15.7

11.19.5

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0


Age 16-19 Age 20+

May Unemployment Rates by Race and Age


In 1998, unemployment reached a 30-year low of 4.5%

In 1998, the incarceration rate reached its highest point in U.S. history, with 1.78 million men in prisons and jails.

What does this mean for the true unemployment in African American communities?

Source: Bruce Western; Incarceration, Unemployment, and Inequality

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

9.00%

10.00%

1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997

White Black Other

Percent of U.S. population in racial group under correctional supervision

Source: US Bureau of Justice Statistics

Federal ARRA Contract Procurement as of May 7th

Source: Federal Procurement Data System, and US Census Bureau 2002 Economic Survey of Business Owners

16.1%

9.3%

3.0% 4.1%2.9%

17.0%

5.4% 4.1% 5.5% 3.7%

28.2%

5.2%6.8%

4.8%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

Non-White Women Black Latino Asian

Contracts % Contract Value % % of all US Businesses

Firm O wnership # of Contracts % of Contracts $Value of Contracts % of Contract $ValueNon-White* 7,274 16.1% $4,393,897,361 17.0%Black 1,365 3.0% $1,050,405,579 4.1%Latino 1,874 4.1% $1,411,950,746 5.5%Women 4,234 9.3% $1,405,745,109 5.4%Asian 1327 2.9% $950,637,041 3.7%Totals 45,306 - $25,891,578,760 -

Source: Federal Procurement Data System

Women-owned, Latino-owned, Black-owned, and Asian-owned businesses account for 28.2%, 6.8%, 5.2%, and 4.8% of all U.S. businesses respectively, according to the US Census Bureau, 2002 Economic Census Survey of Business Owners

0.0

5.0

10.0

15.0

20.0

25.0

30.0

Feb-Sept 2009% of Contracts Feb-Sept 2009 % of Contract $Value

Sept-May 2010% of Contracts Sept- May2010 % of Contract $Value

Source: Federal Procurement Data System

Federal ARRA Contract Procurement: Growing in Equity

ARRA has provided a much-needed safety net for communities in crisis.

A lesson in building a more open form of government; as of October 1, 2010, all Federal spending will be tracked similarly to Recovery.gov, developing more sub-recipient tracking.

How can we capitalize on new infrastructure and energy investments?

Is ARRA stimulating the job growth we need? How can transparency and tracking become

more useful for pursuing equity? What will happen with state budgets when

the state stabilization funding in ARRA is over?

What have the inequities found in ARRA shown us about our systems and funding streams?

An unprecedented housing crisis

Source: Policy Matters Ohio

A deep and prolonged recessionSource: U.S. Federal Reserve Bank of St. Louis Source: Center for Budget & Policy Priorities

An uneven recession with many disparate impacts Race, Age, Gender,

Geography, Educational Attainment, Occupation

Intersections where the recession cuts deep From recession to economic

crisis

5.0

10.0

15.0

20.0

25.0

30.0

J-07 S-07 N-07 J-08 M-08 M-08 J-08 S-08 N-08 J-09 M-09 M-09 J-09 S-09 N-09

Underemployment Rate by Race July 2007 to Nov 2009(Calculated by the Economic Policy Institute)

Black Latino White Total

African Americans of all income levels were twice as likely or more than twice as likely to receive high-cost loans as Whites in 171metropolitan statistical areas (MSAs) during 2005.

In 159 metropolitan areas, more than 40% of the loans received by middle and upper income African Americans were high-cost loans.

Source: National Community Reinvestment Coalition; Income is No Shield Against Racial Differences in Lending, July 2007

7.0

12.8

9.9

7.78.7

16.5

12.6

9.7

6.0

8.0

10.0

12.0

14.0

16.0

18.0


Unemployment Rate by Race (January 09 to January 10)

Jan-09 Jan-10

22.3%

32.2%

38.4%

33.9%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%


Percent Change in Unemployment, by Race: (January 2009 to January 2010)

Total3rd Quarter

2009

Projected 1st Quarter

2010Black

3rd Quarter 2009


2010White

3rd Quarter 2009


2010Latino

3rd Quarter 2009


2010

Michigan 15.2% 15.7%



Nevada 20.1% 19.0%

Nevada 13.0% 12.3%

South Carolina 20.4% 22.7%

Rhode Island 11.2% 11.7%

California 15.6% 16.9%

Rhode Island 12.8% 13.4%

Ohio 19.5% 22.0%

Oregon 11.0% 12.4%

Florida 13.1% 14.3%

California 12.1% 13.1%

Illinois 18.6% 20.2%

Kentucky 10.6% 11.2%

New Jersey 12.0% 12.6%

Oregon 11.8% 13.3%

Alabama 18.0% 18.8%

Nevada 10.6% 10.0%

Arizona 11.6% 13.1%

Source: Derived from data tables and analysis conducted by the Economic Policy Institute. Available on the EPI website at: www.epi.org

Top Five States with the Highest Unemployment Rates by Race (Ranked by 2009 3rd Quarter Unemployment)

61.5

%

52.6

%

29.8

%

19.2

%

8.7%

61.9

%

52.5

%

29.5

%

19.1

%

8.6%

32.3

%

35.6

%

43.6

% 48.4

%

24.2

%

32.0

% 35.8

%

43.7

% 48.3

%

24.3

%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

Very Low Low Moderate High Very High

Black Males; 0-14 Black Females; 0-14 White Females; 0-14 White Males; 0-14

Race and Gender in Relation to Access to Opportunity in Los Angeles

9 .1

17 .6

13 .8

10 .8

6 .8

13 .311 .5

8 .4

0.02.04.06.08.0

10.012.014.016.018.020.0


Men Women

23 .5

43 .8

37 .2

26 .4

8 .1 10 .212 .9

9 .0

0.05.0

10.015.020.025.030.035.040.045.050.0


Age 16-19 Age 20+

Unemployment by Gender & Race January 2010 Unemployment by Age & Race

January 2010

A “recession generation”, As New York Times columnist Bob Herbert stated: “…there is little doubt that poverty and family homelessness are rising,

that the quality of public education in many communities is deteriorating and that legions of children are losing access to health care as their parents join the vastly expanding ranks of the unemployed. This is a toxic mix for children, a demoralizing convergence of factors that have long been known to impede the ability of young people to flourish.”▪ Bob Herbert. “Children in Peril”, The New York Times. April 20th 2009.

Black

Child Poverty 2008 Native American

Child Poverty 2008 Latino

Child Poverty 2008 White

Child Poverty 2008

Mississippi 48% New Mexico 37% Kentucky 41% West Virginia 22%Arkansas 47% Arizona 35% Arkansas 39% Kentucky 20%Kentucky 44% California 24% Tennessee 39% Montana 18%Louisiana 43% Oklahoma 24% Alabama 36% Arkansas 17%Oklahoma 43% Alaska 23% Pennsylvania 36% Oklahoma 17%Wisconsin 42% Nevada 9% Rhode Island 36% Tennessee 16%Michigan 41% Data unavailable for other States Massachusetts 35% Mississippi 15%Ohio 41% Oregon 35% Indiana 14%Indiana 40% North Carolina 34% Maine 14%Alabama 38% Oklahoma 34% Missouri 14%Source: U.S. Census Bureau Data (American Community Survey), Analyzed by the Annie E. Casey Foundation Kids Count Database

Top Ten States for Child Poverty (By Race) in 2008

33

Foreclosures pull wealth/equity and assets out of the neighborhood

Widespread displacement of renters, homeowners which rips the neighborhood’s social fabric and creates instability for school age children

The growth of vacant property encourages crime, disinvestment and public safety risks

Challenges which eventually ensnare all residents (even those who were never foreclosed upon)

Positives – preventing “draconian” state budget cuts Keeping families out of poverty

Source: Center for Budget & Policy PrioritiesSource: Center for Budget & Policy Priorities

Federal and State government failure to effectively track racial elements of recovery

Recovery.gov contains no race-based tracking No sub-recipient tracking Jobs data contains no race, gender, zip

code information

38

Universal policies assume a universal norm.

People are situated differently in society, so any conceptualization of what is “universal” is inherently flawed.

▪ Treating people who are situated differently as though they are the same can result in greater inequities.

▪ These slides will highlight historical examples of policies that were universal in name, but not necessarily in practice, thus resulting in greater inequities.

GI Bill ■ Social Security ■ Title I

Two concerns: 1) Agency programs funded by ARRA are using pre-

existing formulas. There is a greater need to more carefully align Agency programmatic activities with ARRA’s goals, particularly its emphasis on job creation and assistance to those most affected by the crisis.

2) The mandate to expend ARRA funds as quickly as possible, with special priority given to ‘shovel-ready’ projects and projects receiving private investment, may be giving short-shrift to civil rights compliance, particularly Title VI and Title VIII of the Civil Rights Act of 1964.

3

Our research/critique American Recovery Reinvestment Act (stimulus)▪ Has ARRA helped communities in greatest need?▪ Yes and No▪ Data challenges make “equity” assessment extremely

challenging▪ Many areas for improvement

Proposed jobs bill?

If ARRA is going to fulfill its purposes, and help those who have been most impacted by the economic downturn, then greater targeting is necessary. Targeted policies may appear to favor some groups

over others.

Targeted policies often are perceived as zero-sum.

Advocating for targeted policies can be construed as catering to “special interests” or advocating for “preferences.”

4

4

The “shovel ready” stimulus package jobs “can benefit unemployed people of color and women if specific incentives and enforcement tools are enacted to ensure fair access to these opportunities.

All stimulus projects should require local resident hiring goals and create a link to community-based groups as the first line contact for construction jobs.

▪ Local hiring requirements are a proven approach to bring jobs to under-represented constituencies in construction trades. These requirements can be applied to permanent jobs as well.”

Center for Social Inclusion. “Economic Recovery for Everyone: Racial Equity and Prosperity.” Talking Points.

Assuring civil rights compliance, tracking and data on recovery and recession

More targeted investment (geography, race, areas of need)

More investment in broader community infrastructure (not just roads)

Connecting marginalized workers to the growth sectors in the “new” economy E.g. Linking green economy initiatives to worker

training

The most recently proposed jobs bill Targeted economic investments and job relief programs

with universal goals▪ Targeting by geography/race/need▪ More proactive (and mandatory) minority business procurement

activities

This also needs to be tied to more long term solutions Education/training, preparing for the new economy Addressing state budget challenges (at the state level and

the federal level) Addressing structural issues

One Last Thing……..

Looking for more information? Please visit: www.fairrecovery.org

racial equity impacts of the economic recovery

Technology